you need some editing in your xorg.conf file. the driver you're using does not support the 3d desktops. You need the open source driver. Read this--->
https://help.ubuntu.com/community/RadeonDriver
ps- be very careful! adding the lines to xorg.conf. I haven't been able to use the Option "XAANoOffscreenpixmaps" without screwing up my drivers. I then had to use vim to reload my conf file. You may as well
write down this info too in case you do what i did. It will get you back up so you can edit the file over.
sudo dpkg-reconfigure -phigh xserver-xorg
Good Luck!